Clogged Port of Los Angeles:
Capitalism’s Mess

Oct 25, 2021

President Biden recently announced that the Port of Los Angeles will operate “24 hours a day, seven days a week” as a response to an unprecedently-jammed port that handles 40% of products imported into the U.S., products which are worth one TRILLION dollars. With Biden’s announcement, things were supposed to gradually improve at the port. Yet, a week later, the crisis had only worsened, with the number of giant ships waiting outside the port to unload their containers increasing from 60 to about 100.

In fact, the entire port system into and out of Los Angeles was in no shape to handle the big increase in traffic inside and outside the port, nor did it have the means to suddenly handle any increase in hours of operation. This is because the operators of the Port of Los Angeles and the companies that use the port have invested very, very little, even less than in many other countries. Thus, investment in robotized crane systems, software, warehouses, roads, and rail systems, was minimized or neglected.

Second, they had also reduced their so-called “labor costs,” to a minimum. Even before the pandemic hit, there was already a shortage of dock workers—a shortage that was made even worse by the pandemic, as many dock workers were sickened and some even died. That dire shortage cannot be made up in a short period of time, since many of the port jobs require a high level of skill and expertise, and it takes a long time for new port workers to get the proper training and certification.

At the same time, transport of containers has also been crippled. Much of the cargo is transported by truck. But long ago, to reduce “labor costs,” trucking companies implemented an “Uber” style trucking system where the individual truckers owned or leased their trucks and were paid by the load. Under this system, truckers often earn less than minimum wage, after expenses. In other words, the companies have treated these truckers like indentured servants. Such a pulverized workforce, paid less than a living wage, basically fell apart after the pandemic hit, resulting in a severe shortage of truckers.

Transport by train is no better. Only one railroad company, Union Pacific, controls the rail transport of the Port of Los Angeles. Since 2015, Union Pacific has fired more than one-third of its workforce. So, the railway system cannot handle the currently sharply-increased number of containers, because Union Pacific does not have enough workers and rolling stock to move these containers.

So, the companies and their system run the Port of Los Angeles, and its operation rode the entire system into the ground to maximize their profits. They might have been able to make the entire system work before the pandemic. But once the reopening from the pandemic led to a big increase in traffic, the entire system fell apart, leading to an enormous crisis.

Now these companies are using the shortages that they themselves created as an excuse to exorbitantly increase the prices of their products and services.

The seven largest cargo carriers reported more than 23 billion dollars in profits in the first half of this year, compared with just one billion dollars in the same period last year. The gross profit of Home Depot, which is one of the largest companies that use the port, increased by 20%, 49 billion dollars, during the twelve months ending on July 31, 2021. Walmart’s gross profit was 142 billion dollars for the twelve months ending on July 31, 2021, a 6.3% increase year-over-year.

Of course, in the end, it is the consumer, that is, the working class, that pays the higher prices for products. Just like it was the workers who lost their jobs, both before and during the pandemic.

No, this crisis was not just produced by the pandemic and the reopening, but by how capitalism operates and controls the economy—where everything is just run for the profit of a tiny minority, the capitalist class. If workers could control and operate the economy collectively for the benefit of everybody, we could have prevented this dire result from striking us hard, considering that every modern technology is available at our disposal.